China Leading Global Race to Make Clean Energy

By KEITH BRADSHER, NY Times, January 30, 2010

TIANJIN, China — China vaulted past competitors in Denmark, Germany, Spain and the United States last year to become the world’s largest maker of wind turbines, and is poised to expand even further this year.

China has also leapfrogged the West in the last two years to emerge as the world’s largest manufacturer of solar panels. And the country is pushing equally hard to build nuclear reactors and the most efficient types of coal power plants.

These efforts to dominate renewable energy technologies raise the prospect that the West may someday trade its dependence on oil from the Mideast for a reliance on solar panels, wind turbines and other gear manufactured in China.

“Most of the energy equipment will carry a brass plate, ‘Made in China,’ ” said K. K. Chan, the chief executive of Nature Elements Capital, a private equity fund in Beijing that focuses on renewable energy.

President Obama, in his State of the Union speech last week, sounded an alarm that the United States was falling behind other countries, especially China, on energy. “I do not accept a future where the jobs and industries of tomorrow take root beyond our borders — and I know you don’t either,” he told Congress.

The United States and other countries are offering incentives to develop their own renewable energy industries, and Mr. Obama called for redoubling American efforts. Yet many Western and Chinese executives expect China to prevail in the energy-technology race.

Multinational corporations are responding to the rapid growth of China’s market by building big, state-of-the-art factories in China. Vestas of Denmark has just erected the world’s biggest wind turbine manufacturing complex here in northeastern China, and transferred the technology to build the latest electronic controls and generators.

“You have to move fast with the market,” said Jens Tommerup, the president of Vestas China. “Nobody has ever seen such fast development in a wind market.”

Renewable energy industries here are adding jobs rapidly, reaching 1.12 million in 2008 and climbing by 100,000 a year, according to the government-backed Chinese Renewable Energy Industries Association.

Yet renewable energy may be doing more for China’s economy than for the environment. Total power generation in China is on track to pass the United States in 2012 — and most of the added capacity will still be from coal.

China intends for wind, solar and biomass energy to represent 8 percent of its electricity generation capacity by 2020. That compares with less than 4 percent now in China and the United States. Coal will still represent two-thirds of China’s capacity in 2020, and nuclear and hydropower most of the rest.

As China seeks to dominate energy-equipment exports, it has the advantage of being the world’s largest market for power equipment. The government spends heavily to upgrade the electricity grid, committing $45 billion in 2009 alone. State-owned banks provide generous financing.

China’s top leaders are intensely focused on energy policy: on Wednesday, the government announced the creation of a National Energy Commission composed of cabinet ministers as a “superministry” led by Prime Minister Wen Jiabao himself.

Regulators have set mandates for power generation companies to use more renewable energy. Generous subsidies for consumers to install their own solar panels or solar water heaters have produced flurries of activity on rooftops across China.

China’s biggest advantage may be its domestic demand for electricity, rising 15 percent a year. To meet demand in the coming decade, according to statistics from the International Energy Agency, China will need to add nearly nine times as much electricity generation capacity as the United States will.

So while Americans are used to thinking of themselves as having the world’s largest market in many industries, China’s market for power equipment dwarfs that of the United States, even though the American market is more mature. That means Chinese producers enjoy enormous efficiencies from large-scale production.

In the United States, power companies frequently face a choice between buying renewable energy equipment or continuing to operate fossil-fuel-fired power plants that have already been built and paid for. In China, power companies have to buy lots of new equipment anyway, and alternative energy, particularly wind and nuclear, is increasingly priced competitively.

Interest rates as low as 2 percent for bank loans — the result of a savings rate of 40 percent and a government policy of steering loans to renewable energy — have also made a big difference.

As in many other industries, China’s low labor costs are an advantage in energy. Although Chinese wages have risen sharply in the last five years, Vestas still pays assembly line workers here only $4,100 a year.

China’s commitment to renewable energy is expensive. Although costs are falling steeply through mass production, wind energy is still 20 to 40 percent more expensive than coal-fired power. Solar power is still at least twice as expensive as coal.

The Chinese government charges a renewable energy fee to all electricity users. The fee increases residential electricity bills by 0.25 percent to 0.4 percent. For industrial users of electricity, the fee doubled in November to roughly 0.8 percent of the electricity bill.

The fee revenue goes to companies that operate the electricity grid, to make up the cost difference between renewable energy and coal-fired power.

Renewable energy fees are not yet high enough to affect China’s competitiveness even in energy-intensive industries, said the chairman of a Chinese industrial company, who asked not to be identified because of the political sensitivity of electricity rates in China.

Grid operators are unhappy. They are reimbursed for the extra cost of buying renewable energy instead of coal-fired power, but not for the formidable cost of building power lines to wind turbines and other renewable energy producers, many of them in remote, windswept areas. Transmission losses are high for sending power over long distances to cities, and nearly a third of China’s wind turbines are not yet connected to the national grid.

Most of these turbines were built only in the last year, however, and grid construction has not caught up. Under legislation passed by the Chinese legislature on Dec. 26, a grid operator that does not connect a renewable energy operation to the grid must pay that operation twice the value of the electricity that cannot be distributed.

With prices tumbling, China’s wind and solar industries are increasingly looking to sell equipment abroad — and facing complaints by Western companies that they have unfair advantages. When a Chinese company reached a deal in November to supply turbines for a big wind farm in Texas, there were calls in Congress to halt federal spending on imported equipment.

“Every country, including the United States and in Europe, wants a low cost of renewable energy,” said Ma Lingjuan, deputy managing director of China’s renewable energy association. “Now China has reached that level, but it gets criticized by the rest of the world.”

America’s Defining Choice

By NICHOLAS D. KRISTOF, NY Times Nov. 12, 2009

President Obama and Congress will soon make defining choices about health care and troops for Afghanistan.

These two choices have something in common — each has a bill of around $100 billion per year. So one question is whether we’re better off spending that money blowing up things in Helmand Province or building up things in America.

The total bill in Afghanistan has been running around $1 million per year per soldier deployed there. That doesn’t include the long-term costs that will be incurred in coming decades — such as disability benefits, or up to $5 million to provide round-the-clock nursing care indefinitely for a single soldier who suffers brain injuries.

So if President Obama dispatches another 30,000 or 40,000 troops, on top of the 68,000 already there, that would bring the total annual bill for our military presence there to perhaps $100 billion — or more. And we haven’t even come to the human costs.

As for health care reforms, the 10-year cost suggests an average of $80 billion to $110 billion per year, depending on what the final bill looks like.

Granted, the health care costs will continue indefinitely, while the United States cannot sustain 100,000 troops in Afghanistan for many years. On the other hand, the health care legislation pays for itself, according to the Congressional Budget Office, while the deployment in Afghanistan is unfinanced and will raise our budget deficits and undermine our long-term economic security.

So doesn’t it seem odd to hear hawks say that health reform is fiscally irresponsible, while in the next breath they cheer a larger deployment of troops in Afghanistan?

Meanwhile, lack of health insurance kills about 45,000 Americans a year, according to a Harvard study released in September. So which is the greater danger to our homeland security, the Taliban or our dysfunctional insurance system?

Who are these Americans who die for lack of insurance? Dr. Linda Harris, an ob-gyn in Oregon tells of Sue, a 31-year-old patient of hers. Sue was a single mom who worked hard — sometimes two jobs at once — to ensure that her beloved daughter would enjoy a better life.

Sue’s jobs never provided health insurance, and Sue felt she couldn’t afford to splurge on herself to get gynecological checkups. For more than a dozen years, she never had a Pap smear, although one is recommended annually. Even when Sue began bleeding and suffering abdominal pain, she was reluctant to see a doctor because she didn’t know how she would pay the bills.

Finally, Sue sought help from a hospital emergency room, and then from the low-cost public clinic where Dr. Harris works. Dr. Harris found that Sue had advanced cervical cancer. Three months later, she died. Her daughter was 13.

“I get teary whenever I think about her,” Dr. Harris said. “It was so needless.”

Cervical cancer has a long preinvasive stage that can be detected with Pap smears, and then effectively treated with relatively minor procedures, Dr. Harris said.

“People talk about waiting lines in Canada,” Dr. Harris added. “I say, well, at least they have a line to wait in.”

Based on the numbers from the Harvard study, a person like Sue dies as a consequence of lack of health care coverage every 12 minutes in America. As many people die every three weeks from lack of health insurance as were killed in the 9/11 attacks.

Health coverage is becoming steadily more precarious as companies try to cut costs and insurance companies boost profits by denying claims and canceling coverage of people who get sick. I grew up on a farm in Yamhill, Ore., where we sometimes had greased pig contests. I’m not sure which is harder: getting a good grip on a greased hog or wrestling with an insurance company trying to avoid paying a claim it should.

Joe Lieberman, a pivotal vote in the Senate, says he recognizes that there are problems and would like reform, but he denounces “another government health insurance entitlement, the government going into the health insurance business.” Look out — it sounds as if Mr. Lieberman is planning to ax Medicare.

The health reform legislation in Congress is imperfect, of course. It won’t do enough to hold down costs; it may restrict access even to private insurance coverage for abortion services; it won’t do enough to address public health or unhealthy lifestyles.

Likewise, troop deployment plans in Afghanistan are imperfect. Some experts think more troops will help. Others think they will foster a nationalist backlash and feed the insurgency (that’s my view).

So where’s the best place to spend $100 billion a year? Is it on patrols in Helmand? Or is it to refurbish our health care system so that people like Sue don’t die unnecessarily every 12 minutes?

•

Lieberman: I'll support Republicans in 2010

Note From Greetings: So he convinced the Dems he was with them so he could keep his chair... until he could help defeat them the next time around ... so he could keep his chair. Why would either party trust Droopy Dawg.

The senator from Connecticut almost lost his committee chair last time he stumped for the GOP

By Alex Koppelman

If you thought Sen. Joe Lieberman, I-Conn., couldn't tick off any more liberals than he did earlier this week, well, you thought wrong. It was enough for Lieberman, who managed to keep a committee chairmanship this year despite having campaigned for John McCain last year, to say he would join a Republican filibuster of a healthcare reform bill containing a public option. Now he says he could be campaigning for more candidates from the GOP next year.

"I probably will support some Republican candidates for Congress or Senate in the election in 2010. I'm going to call them as I see them," Lieberman told ABC News. "There's a hard core of partisan, passionate, hardcore Republicans,. There's a hard core of partisan Democrats on the other side. And in between is the larger group, which is people who really want to see the right thing done, or want something good done for this country and them -- and that means, sometimes, the better choice is somebody who's not a Democrat."wg? And why does he still have a chaimanship?

Joe Wilson, Serena Williams and Kanye West Kick Off National Outburst Week

Andy Borowitz

BorowitzReport.com, Huffington Post

Posted: September 14, 2009 02:22 PM

Rep. Joe Wilson (R-SC), tennis legend Serena Williams and recording artist Kanye West held a press conference in Washington, DC today to kick off the first annual National Outburst Week.

"We're here to celebrate every American's right to unleash a sudden, unprovoked verbal outburst," Ms. Williams said. "And if you don't like it, you can shove this tennis ball down your fucking - "

"Hold up, Serena," said Mr. West, seizing the microphone. "I just want to say that Beyonce's video is one of the greatest videos of all -"

"You lie!" shouted Rep. Wilson.

C-Span said that it would offer coverage of National Outburst Week "with many interruptions." More here.

A War Against Organizing

Note from Greetings: Does anyone notice a pattern between this story and the following one on China's overtaking of the U.S. as a superpower? Perhaps maintaining a viable middle class... AND our own manufacturing.

By Kate Bronfenbrenner, washingtonpost.com
Wednesday, June 3, 2009

Angel Warner, an employee at a Rite Aid distribution center, sat next to me recently in a congressional briefing room and described what happened when she and her fellow workers tried to form a union in their California workplace. She talked about the surveillance, constant threats and harassment they endured; how she and other workers were repeatedly taken aside and interrogated, one on one, about how they planned to vote; how two co-workers were fired; and how the rest lived in fear that any day they, too, might get a pink slip. The union filed numerous charges of unfair labor practices and eventually won the organizing election. But three years after the campaign began, Warner and her fellow Rite Aid workers still don't have a contract.

Like most U.S. companies, Rite Aid takes full advantage of current labor law to try to keep workers from exercising their full rights to organize and collectively bargain under the National Labor Relations Act. Far from an aberration, such behavior by U.S. companies during union organizing campaigns has become routine, and our nation's labor laws neither protect workers' rights nor provide disincentives for employers to stop disregarding those rights.

Late last month I published a study, "No Holds Barred," that was presented at the hearing at which Angel spoke. I looked at a random sample of more than 1,000 union elections over a five-year period to determine the parameters of employer behavior during union representation elections in the private sector and the limitations of the labor law system established to regulate that behavior.

In 34 percent of the elections I studied, companies fired employees for union activity. In 57 percent of elections, employers threatened to shut down all or part of their facilities, and in 47 percent, employers threatened to cut wages and benefits.

In 63 percent of campaigns, supervisors met with workers one on one and interrogated them about their union activity or whether they or others were supporting the union. In 54 percent of the elections, supervisors used these one-on-ones to threaten individual workers.

The bottom line is that there has been a steady decline of workers' rights in the past several decades. Colleagues and I have examined this issue in a series of studies over the past two decades. My new data show that employers are more than twice as likely as they were in the 1990s to use 10 or more tactics -- including threats and firings -- to thwart workers' organizing efforts, and they are more likely to use more punitive and aggressive tactics such as interrogations, discharges and threats of plant closings, while shifting away from softer tactics such as social events, promises of improvement and employee involvement programs.

For the vast majority of workers who want to join unions today, the right to organize and bargain collectively -- free from coercion, intimidation and retaliation -- is at best a promise indefinitely deferred. In election campaigns overseen by the National Labor Relations Board, it is now standard practice for companies to subject workers to threats, interrogation, harassment, surveillance and retaliation for union activity.

The failure of the system to defend workers' rights in a timely manner multiplies the obstacles workers face when seeking union representation, creating delays that favor employers. Employers appeal a high percentage of the cases to the NLRB, and in the most egregious instances, the employer can count on a final decision being held up by three to five years.

A key aspect of proposed labor law reform, the Employee Free Choice Act, concerns revisions to the rules surrounding arbitration of the first contract. My findings show that this provision may be among the most crucial of the legislation. Fifty-two percent of workers who form a union are still without a contract a year after they win an election, I found, and 37 percent remain without a contract two years after the election. For employers, labor law provides yet another means to indefinitely delay unionization.

It doesn't have to be this way. My survey data from the public sector portray an atmosphere in which workers may organize free from the kind of coercion, intimidation and retaliation that so taints the election process in the private sector. Most of the states in the public-sector sample have laws allowing workers to choose a union through card check or voluntary recognition. And more than a third of public-sector workers in the United States are members of unions.

Unless Congress passes serious labor law reform with real penalties, only a small fraction of the workers who seek union representation will succeed. If recent trends continue, there will no longer be a functioning legal mechanism to effectively protect the right of private-sector workers to organize and collectively bargain. Our country cannot afford to make workers defer their rights and aspirations for union representation any longer.

The writer is director of labor education research at Cornell University's School of Industrial and Labor Relations. Her paper "No Holds Barred -- The Intensification of Employer Opposition to Organizing" was published last month by the nonprofit Economic Policy Institute.

Wall Street Voodoo

by Paul Krugman, NY Times, January 19, 2009

Old-fashioned voodoo economics — the belief in tax-cut magic — has been banished from civilized discourse. The supply-side cult has shrunk to the point that it contains only cranks, charlatans, and Republicans.

But recent news reports suggest that many influential people, including Federal Reserve officials, bank regulators, and, possibly, members of the incoming Obama administration, have become devotees of a new kind of voodoo: the belief that by performing elaborate financial rituals we can keep dead banks walking.

To explain the issue, let me describe the position of a hypothetical bank that I’ll call Gothamgroup, or Gotham for short.

On paper, Gotham has $2 trillion in assets and $1.9 trillion in liabilities, so that it has a net worth of $100 billion. But a substantial fraction of its assets — say, $400 billion worth — are mortgage-backed securities and other toxic waste. If the bank tried to sell these assets, it would get no more than $200 billion.

So Gotham is a zombie bank: it’s still operating, but the reality is that it has already gone bust. Its stock isn’t totally worthless — it still has a market capitalization of $20 billion — but that value is entirely based on the hope that shareholders will be rescued by a government bailout.

Why would the government bail Gotham out? Because it plays a central role in the financial system. When Lehman was allowed to fail, financial markets froze, and for a few weeks the world economy teetered on the edge of collapse. Since we don’t want a repeat performance, Gotham has to be kept functioning. But how can that be done?

Well, the government could simply give Gotham a couple of hundred billion dollars, enough to make it solvent again. But this would, of course, be a huge gift to Gotham’s current shareholders — and it would also encourage excessive risk-taking in the future. Still, the possibility of such a gift is what’s now supporting Gotham’s stock price.

A better approach would be to do what the government did with zombie savings and loans at the end of the 1980s: it seized the defunct banks, cleaning out the shareholders. Then it transferred their bad assets to a special institution, the Resolution Trust Corporation; paid off enough of the banks’ debts to make them solvent; and sold the fixed-up banks to new owners.

The current buzz suggests, however, that policy makers aren’t willing to take either of these approaches. Instead, they’re reportedly gravitating toward a compromise approach: moving toxic waste from private banks’ balance sheets to a publicly owned “bad bank” or “aggregator bank” that would resemble the Resolution Trust Corporation, but without seizing the banks first.

Sheila Bair, the chairwoman of the Federal Deposit Insurance Corporation, recently tried to describe how this would work: “The aggregator bank would buy the assets at fair value.” But what does “fair value” mean?

In my example, Gothamgroup is insolvent because the alleged $400 billion of toxic waste on its books is actually worth only $200 billion. The only way a government purchase of that toxic waste can make Gotham solvent again is if the government pays much more than private buyers are willing to offer.

Now, maybe private buyers aren’t willing to pay what toxic waste is really worth: “We don’t have really any rational pricing right now for some of these asset categories,” Ms. Bair says. But should the government be in the business of declaring that it knows better than the market what assets are worth? And is it really likely that paying “fair value,” whatever that means, would be enough to make Gotham solvent again?

What I suspect is that policy makers — possibly without realizing it — are gearing up to attempt a bait-and-switch: a policy that looks like the cleanup of the savings and loans, but in practice amounts to making huge gifts to bank shareholders at taxpayer expense, disguised as “fair value” purchases of toxic assets.

Why go through these contortions? The answer seems to be that Washington remains deathly afraid of the N-word — nationalization. The truth is that Gothamgroup and its sister institutions are already wards of the state, utterly dependent on taxpayer support; but nobody wants to recognize that fact and implement the obvious solution: an explicit, though temporary, government takeover. Hence the popularity of the new voodoo, which claims, as I said, that elaborate financial rituals can reanimate dead banks.

Unfortunately, the price of this retreat into superstition may be high. I hope I’m wrong, but I suspect that taxpayers are about to get another raw deal — and that we’re about to get another financial rescue plan that fails to do the job.

U.A.E. 123

NY Times Editorial, January 19, 2009

The United Arab Emirates has bested other oil-rich Persian Gulf countries by becoming the first to conclude a legally binding nuclear cooperation agreement with the Bush administration. It deserves even greater congratulations for forswearing uranium enrichment and plutonium reprocessing. Those are the key processes for making fuel for nuclear reactors — or nuclear weapons.

Many countries have these agreements — known in the business as 123’s — with Washington, which allow them to buy American nuclear reactors and fuel. But none have made that important concession.

Under the Nuclear Nonproliferation Treaty, all members in good standing have the right to make their own fuel. But the temptations are considerable and the technology far too easy to divert (see Iran).

That is why the U.A.E’s choice is so especially important, and why other nuclear suppliers should be encouraging their clients to make the same choice.

Nuclear energy is one way to address climate change, and developing countries — that agree to international rules for inspections — must have the same access to nuclear technology as the developed world.

President Bush promoted nuclear energy with gusto but notably failed to develop a strategy to ensure that a proliferation of nuclear power would not also lead to a proliferation of nuclear weapons. Mr. Obama and the new Congress must do better.

More than 25 nations plan to build nuclear power plants for the first time. That includes Saudi Arabia, which is negotiating its own cooperation deal with Washington.

Many of these countries say they must diversify to meet future energy needs. And the major nuclear suppliers are only too eager to compete for their business.

Too often these countries ignore serious questions about whether more nuclear plants will pose new safety and waste disposal hazards, and whether their clients’ sudden enthusiasm is driven less by concerns about global warming or declining oil reserves and more by rising fears of Iran’s nuclear ambitions and appetites for their own weapons programs.

Congress must review the U.A.E. deal before it is finalized. Some lawmakers have raised worrisome questions about goods with military or potential nuclear- related uses moving through Dubai, one of the emirates, to Iran. Officials there must explain how they plan to strengthen their export controls. If not, Congress may have to slow its approval or place tougher restrictions on the 123 agreement until it is sure that American technology sold to the U.A.E. cannot be diverted.

There is also something unsettling about the slick lobbying campaign the U.A.E. has mounted to push the deal through quickly.

The agreement sets an important and welcome new standard. But Congress must exercise due diligence with this agreement and all of the others that will follow.